Analyses
Biden Should Go Big, Fast, and Simple
By Derek Thompson,The Atlantic, January 20, 2021
Jan 25, 2021 - 11:02:05 AM

The new president must not repeat Obama's mistakes.

When Franklin D. Roosevelt became president in 1932, the nation was facing concentric crises: the immediate, house-on-fire disaster of rolling bank closures; the broader economic depression; and, beyond that, deeply entrenched problems that the depression had highlighted, including elderly poverty. Roosevelt’s first 100 days addressed the first two crises with historic directness. He reopened the banks and directly employed thousands of Americans through measures such as the Civilian Conservation Corps. Then, near the end of his first term, he signed the Social Security Act, which has reduced senior poverty and become one of the most popular federal programs in the United States.

President Joe Biden also faces concentric crises, which move outward toward the future as you unpeel them: the biological threat of the pandemic, the economic recession, and, beyond that, the entrenched problem of child poverty. He also has to contend with the problem casting a shadow over the whole century, the existential crisis of climate change.

Biden’s first 100 days should address the first two crises with Rooseveltian focus. Quench the conflagration of the moment—then fight the fire of the future. With unified control of government, Biden and the Democrats can accelerate the end of a pandemic, lay the groundwork for the strongest economic growth in decades, eliminate child poverty, and put America on a path toward becoming a world leader in climate-change mitigation technology.

But to accomplish any of this, Biden will have to cast off some shibboleths of the previous Democratic regime in which he served as vice president.

Instead of seeking to change Americans’ behavior with subtle technocratic nudges, as Barack Obama’s team did, Biden should aim to make his signature policies as stupidly straightforward as possible. Instead of threading the needle of deficit neutrality, as his predecessor did, he should make a strong case to blow out the budget immediately to fill the hole left by the pandemic recession. Where the Obama administration’s approach was too often clever and strewn with budgetary wonkiness, the Biden formula should embrace the opposite: big, fast, and simple.

In 2009, President Barack Obama and the Democrats seized unified control of government during another deep recession. They fought the downturn with a then-record stimulus in the first few months, before producing the Affordable Care Act, which was signed in 2010. The stimulus and Obamacare were good laws with important flaws. Biden should learn from both.

The Obama stimulus was too small and too subtle. It was too small because the Republican opposition was intransigent, and the Democratic coalition was uncomfortable with the multitrillion-dollar deficits necessary to close the GDP gap. And it was too subtle because Obama’s team, including the regulatory czar Cass Sunstein, was transfixed by the emerging science of “nudges,” or sneaky policies to encourage Americans to make efficient decisions. For example, the tax centerpiece of the 2009 stimulus bill got money to families by modestly reducing payroll tax withholding. The nudgey idea was that if Americans got lump-sum checks from the government, they might save the money. But if they looked at their bank account and went, Huh, that’s more than I expected!, they might spend it immediately. Unfortunately, the tax cut was so sneaky that many people didn’t even know about the policy, let alone give Obama credit for it.

The Affordable Care Act had the same issues of size and subtlety, as Slate’s Jordan Weissmann has argued. It was too small because, once again, members of the Democratic coalition, such as Senator Joe Lieberman, refused to support its most ambitious parts, such as a public option. The historic act failed to make itself immediately felt, because its most important components were delayed to reduce the 10-year budgetary impact. Medicaid expansion, for instance, didn’t begin until several years after Obama signed the law.

Biden can rectify these errors by putting heft, speed, and simplicity at the heart of his agenda. And perhaps he will. According to reports from The New York Times and The Washington Post, Biden’s first rescue bill, with nearly $2 trillion in spending, will include hundreds of billions of dollars for vaccines and testing, unemployment benefits, and state and local aid. For inspiration on COVID-19 policy, Biden can look to Israel, which went big on early vaccine purchases, went fast and furious with distribution—converting parks, schools, and parking lots into vaccination megacenters—and used simple criteria for its first tranche of shots: health-care workers and seniors.

The centerpiece of the U.S. rescue will be direct payments worth $2,000 to individuals. (That figure technically includes the $600 already sent to millions of households.) Direct payments are the opposite of the sly paternalism preferred by Obama officials in the 2009 stimulus. Americans are not going to see two grand appear in a bank account and go, Huh, I can’t put my finger on it, but I’m feeling subconsciously nudged to buy more socks. They’re going to feel very consciously, very fist-pumpingly elated. Checks are the confetti cannon of the economic-stimulus arsenal—not maximally efficient, just maximally awesome.

Awesomeness matters. One lesson from the Obama years is that smart policy making isn’t just about doing brainy stuff; it’s about doing good and popular stuff in a way that keeps you in power so you can do more good stuff. The Democrats’ failure to properly stimulate the economy in 2010—or get credit for their very real contributions—led to catastrophic midterm losses in the House that made it impossible for them to accomplish much of anything in Obama’s last six years in office. For non-mysterious reasons, polls show extraordinary support for giving $2,000 to every American household as a kind of stimulus-qua-consolation gift for making it through the year from hell (one study indicated that seven in 10 Republicans support the direct payments). With stimulus checks, Biden could endear himself to the persuadable middle of the U.S. electorate, which might enjoy liking an American president, for once.

Speeding up vaccine distribution and getting families ready to spend when the economy opens up should be Biden’s first priorities. The combination of an unlocked retail and leisure sector plus high national savings should lead to a record-breaking economic boom in the second half of 2021.

Biden’s next focus should be kids. His current relief bill already calls for expanding the child tax credit. But reducing child poverty should be more than a line item.

Read: The next phase of vaccination will be even harder

The U.S. has a shameful record when it comes to the poverty and inequality of its youngest. America’s child-poverty rate isn’t just higher than that of similarly rich countries, such as Canada and Australia; it’s also higher than that of Mexico and Russia. America’s problem is twofold. First, the U.S. spends less than half as much as the United Kingdom or Denmark on infants and children. Second, too much U.S. welfare spending on children doesn’t reach families in poverty, in part because the government funnels most of that spending through the federal income tax code (which does little for families who have no taxable income).

Biden’s rescue bill includes an expansion of the child tax credit. That’s a good start. But tax credits are an inefficient tool for fighting child poverty. More than one in five households with kids don't claim the CTC, according to the Treasury Department. That could be because they don’t know it exists, or because they make a mistake filing their return.

If Biden wants to make a real difference, he should support replacing the child tax credit with a universal child allowance. That means the Social Security Administration would just cut a monthly check for every kid under 18, no questions asked. Matt Bruenig, a welfare researcher and the founder of the left-wing think tank the People’s Policy Project, has calculated that a universal child allowance of $370 a month would slash child poverty by about two-thirds.

A universal child allowance would get money into families’ hands immediately. And the political payoff is obvious. Beyond drawing a sharp contrast with the previous president—“Trump trapped kids in cages; we freed kids from poverty”—this legislation would have a useful FDR echo. The Social Security Act took on high elderly poverty; almost 90 years later, we could retrofit the same institution to take on the American shame of high childhood poverty.

Only then should Biden turn to this century’s most important issue: climate change. Just as it would have been politically bizarre for Roosevelt to focus on long-term elderly poverty while the banks were closed, Biden shouldn’t spend a lot of time talking about carbon emissions while a pandemic is killing thousands of people a day. But in the second inning of his presidency, it would make sense for Biden to back a green new deal that’s about handouts over hand slaps. Rather than try to kneecap America’s oil and gas industries, Biden should pledge a subsidy-palooza that helps bring down the price of every technology in the clean-energy portfolio: hundreds of billions in guaranteed federal purchases of clean-energy tech, such as batteries and electric cars; more subsidies for solar and wind energy; and more R&D spending on clean energy and carbon removal. Forget the joke that was “Infrastructure Week.” Biden’s green-energy bill could kick off an Infrastructure Decade.

To pass an ambitious agenda, and keep voters on his side, Biden will have to keep things straightforward and easy to communicate. Fortunately, this seems to be his instinct. During the Democratic primary, Obama-administration expats recalled that, as vice president, Biden had a reputation for interrupting nitty-gritty policy discussions with touchy-feely stem-winders. As president-elect, he’s still shushing aides when they start on the technocratic gobbledygook. “Pick up your phone, call your mother, read her what you just told me,” he tells them. “If she understands, we can keep talking.”

This avoidance of technicalities may one day reveal itself to be a weakness in drafting legislation. But for the moment, it’s a great strength. Biden should aim to inject into his public policy the same qualities that distinguish his preternatural gift for emotional storytelling. Perhaps that might serve as the one-line summary of Biden’s edit on the Obama style of governance: Once more, with feeling.